To answer the following questions, students should use a sum of relevant economic theories

(if require) for the justification of their answers. Students can also use figures (i.e., supply

and demand curves) for presenting their answers.

Consider the financial crisis 2007-2009 in USA.

Now, assume that the crisis has been continuing for 10 years. We call this period as a long run period.

1. Explain the effect of this crisis on USA government's Budget in long-run?

2. Assume that you are a policy maker in USA's government and central bank; how you can recover the crisis by changing macroeconomic variables?